Oracle's dispute with Google over Java APIs is coming back to San Francisco for a third trial. The U.S. Court of Appeals for the Federal Circuit ruled Tuesday that no reasonable jury could have found Google's unlicensed copying of Java APIs into its Android operating system was a fair use. The court once again remanded the case to U.S. District Judge William Alsup, this time for a damages trial where Google could be on the hook for billions of dollars. Android has generated more than $42 billion in advertising revenue, according to evidence presented at the 2016 trial. The Federal Circuit was led once again by Judge Kathleen O'Malley, who upset the first trial with a 2014 ruling that found the Java APIs copyrightable. This time around, she said Alsup focused the fair use trial too narrowly, by limiting the harm caused by Android to the desktop and laptop markets where Oracle was already established.

"That Oracle never built a smartphone device is irrelevant because potential markets include licensing others to develop derivative works," she wrote. "Because the law recognizes and protects a copyright owner’s right to enter a 'potential market,' this fact alone is sufficient to establish market impact."

It's another big win for Oracle's appellate lawyers, led by partner E. Joshua Rosenkranz. Rosenkranz persuaded the Federal Circuit three years ago that 11,000 lines of declaring code that make up the 37 Java APIs in question are copyrightable. Kirkland & Ellis is part of Oracle's team. It's also vindication for Orrick trial partners Peter Bix and Annette Hurst, who had tried to expand the scope of the trial but were blocked by Alsup.

Google was represented by King & Spalding. At oral arguments before the Federal Circuit last December, partner Daryl Joseffer argued that Google had used only a tiny amount of Java to transform the programming language for smartphones.

"The jury heard a lot of evidence that smartphones are an entirely different operating system context from personal computers," he argued then.

But, O'Malley concluded on Tuesday, "Smartphones were not a new context." Oracle predecessor Sun Microsystems was already working on a smartphone version of Java, and had licensed Java to Nokia and Amazon. "Because the Java SE was already being used in smartphones, Google did not 'transform' the copyrighted material into a new context and no reasonable jury could conclude otherwise," O'Malley wrote.

Plus, she added, "merely copying the material and moving it from one platform to another without alteration is not transformative."

Judges S. Jay Plager and Richard Taranto concurred.